Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, has recently disclosed its undisclosed stock purchase, revealing insurer Chubb as its covert investment.
According to a new regulatory filing, Berkshire Hathaway has amassed close to 26 million shares of Chubb, headquartered in Zurich, amounting to a stake valued at $6.7 billion. This acquisition has propelled Chubb to become the ninth-largest holding in Berkshire’s portfolio by the end of March.
The announcement of Berkshire’s stake in Chubb triggered a surge in the latter’s shares, witnessing an almost 7% increase in after-hours trading. Year to date, Chubb’s stock has seen a rise of approximately 12%.
Chubb, originally acquired by insurer Ace Limited in 2016 for $29.5 billion, saw its name retained after the merger. Evan Greenberg, CEO of Chubb, is the offspring of Maurice Greenberg, the former chairman and CEO of insurance titan American International Group.
Berkshire Hathaway, headquartered in Omaha, has established a significant presence in the insurance sector, boasting entities such as the auto insurer Geico, reinsurance giant General Re, and a spectrum of home and life insurance services. In 2022, the conglomerate added insurance company Alleghany to its portfolio with an $11.6 billion acquisition.
Recent developments indicate Berkshire’s exit from positions in Markel and Globe Life within the same industry.
The revelation of Berkshire’s undisclosed purchase comes after two quarters of secrecy, during which Berkshire was granted confidential treatment to withhold details regarding one or more of its stock holdings.
Interestingly, the subject of this clandestine acquisition was not broached during Berkshire’s annual meeting earlier this month in Omaha. Speculation had been rife regarding the undisclosed purchase, with many conjecturing it to be a bank stock, given Berkshire’s notable increase in “banks, insurance, and finance” equity holdings by $1.4 billion in the first quarter, following a $3.59 billion surge in the latter half of last year, as per separate Berkshire filings.
It’s noteworthy that Berkshire’s resort to such confidentiality is relatively uncommon, with the last instance dating back to 2020 when it acquired stakes in Chevron and Verizon.
